The American rare earths company seeking to topple China's dominance | 60 Minutes
In a Nutshell
China dominates over 90% of global rare earth magnet production, vital for smartphones, EVs, fighter jets, and defense tech, leaving the US vulnerable to supply weaponization. MP Materials revived the only active US rare earth mine at Mountain Pass, California—acquired in 2017 by two hedge fund managers—and now mines, refines neodymium-praseodymium, and produces magnets in Texas. The Pentagon invested $400 million for a 15% stake, a 10-year price floor, and 10x production ramp-up by 2028 to secure domestic supply chains against China.
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Last week, President Trump postponed a summit with his Chinese counterpart on account of the war with Iran. When Trump and Xi Jinping meet, rare earth elements will figure prominently. China holds a near monopoly over these strategic metals key to smartphones, robotics, EVs, fighter jets, drones, and radar technology. China controls materials essential to America's ability to wage war.
Tonight, the story of an American company confronting this elemental crisis. It mines rare earth elements, processes them, and makes them into superpowered magnets. It's part owned by American taxpayers in an unusual deal crafted by the federal government.
An hour southwest of Las Vegas, in the Mojave Desert past California, lies a massive cavity in the ground—the only active rare earth mine in the US. Mountain Pass is an unlikely battleground in the trade war with China.
Are we stepping on rare earths as we speak? >> Yes. Everywhere you look is rare.
Michael Rosenthal and James Latinsky are in charge. Two Floridians, finance types suddenly trafficking in mining and metallurgy.
You have no background in geology and now you're running the biggest rare earth mine in the US. >> This is just such an important site and the idea that this entire supply chain was on the other side of the world in China. It just occurred to us that someone had to help fix this problem.
The Trump administration is keenly aware of China's rare earth dominance. Doug Burgum, Secretary of the Interior:
If you have a cell phone, have a laptop, if you drive a car, then you're touching rare earth minerals and rare earth magnets. It's essential to everyday life, but it's also essential to aerospace, telecom, defense systems.
One F-35 fighter jet contains about 100 pounds of rare earths. The US defense industry is subject to the whims of China and Xi Jinping for military technology.
President Trump created the National Energy Dominance Council to secure supply chains for critical and rare earth minerals. Currently, no secure supply chains exist because China has cornered the market.
China weaponizes rare earths: if others start mining or refining, China dumps supply onto the market, driving prices down, making companies unprofitable.
Rare earths aren't rare. What's rare: sites with high enough concentrations and accessible locations to make extraction worthwhile. In purest form, they are elemental metals, periodic table numbers 57 through 71 plus two others: lanthanum, cerium, praseodymium, neodymium, samarium.
Julie Klinger, professor of environmental studies at University of Wisconsin-Madison and rare earth expert:
The thing that distinguishes rare earth elements are their fantastic magnetic, conductive, and optical properties. So they're used often the way you might use spices in cooking because if you add just a little bit of a certain rare earth element, say to a magnet that enables that magnet to be both very small and very powerful.
Geologists found rare earths at Mountain Pass in 1949. By the 1960s, individual rare earths were mined, separated, and utilized, including europium for enhancing red color in early television sets.
In 1982, researchers found neodymium strengthens magnets, used in cell phone buzzers, drone navigation, smart bombs, high-speed rail, and electric vehicles.
For decades, Mountain Pass was the world's rare earth mine, but mining and magnet making moved offshore to China, which could do it cheaper.
The US disinvested in rare earths. >> Absolutely. >> Why? >> It's a dirty business. It's a risky business. It's a difficult business to really break even.
In the 1990s, Mountain Pass fell victim to economics and environmental regulators after radioactive water leaked into the desert. The mine languished for a decade until Molycorp tried unsuccessfully to compete with China.
James Latinsky ran a Chicago hedge fund. When Molycorp filed for bankruptcy in 2015, he saw opportunity.
When you're running a hedge fund, it's not much tangible to it. You're moving numbers on a screen. And then I made the mistake of going out and looking at the site, seeing what your investment looked like. >> Yes. And I was just blown away by the scale of the assets.
Assets: massive open pit mine 3,000 ft across, 600 ft deep, one of the world's richest deposits.
Latinsky partnered with close friend Michael Rosenthal, then at a New York hedge fund.
You appreciate the absurdity of the story for sure. Two hedge fund guys buy a mine. What could go wrong?
They bought the mine in 2017, named it MP Materials. It was underwater financially and literally (30 million gallons puddled at the bottom), with only 8 employees. They got it running: blasting earth, crushing rocks into gravel, milling into fine powder.
Latinsky became CEO; Rosenthal managed operations on site.
How do you characterize the division of labor here? I get dirty and Jim explains what we're doing today.
Mountain Pass now employs more than 700. Mining is the easiest part; hard part is separating rare earths from rock and each other.
Two years ago, after investing hundreds of millions, MP refined neodymium and praseodymium to 99.9% purity.
This is the refined product. This is the money room. This is it. >> Each bag was worth around $120,000. There were 300 bags, roughly $36 million in inventory.
So, this fine powder could end up in your pocket. >> Could end up in my iPhone.
In Fort Worth, Texas, MP built a facility where pure powder gets melted, cooled, compressed, diced into high-powered rare earth magnets. In months, millions will go into GM cars and Apple products starting next year.
MP fulfilled its plan: rare earths from mine to magnets.
Last spring (April), President Trump unveiled global tariffs plan, "liberation day." China retaliated, choking off rare earths to US. Ford Motors stopped making Explorer SUVs temporarily due to magnet shortage.
After trade truces, supply resumed. Latinsky:
Few realize how close we were to economic catastrophe. There were major manufacturers that didn't even realize the extent of the rare earth magnets that they had in their supply chain. We were seeing the economy on the verge of shutdown.
With markets reeling, Trump officials summoned Latinsky and Rosenthal to Washington.
We got called into the Pentagon and it was clear that there was a directive from the president to solve this problem as quickly as possible. >> What did the government want from you? >> The Pentagon wanted a Manhattan style project to accelerate the entire supply chain of rare earth magnets in the country.
Pentagon injected $400 million into MP Materials, took 15% ownership stake—Americans are now in the rare earth business. Deal includes guaranteed 10-year price floor for rare earths, protecting against China flooding the market.
Has there ever been anything like this? >> Well, exactly like this, maybe not. But if you look back, whether it was the railroads or aluminum for aviation prior to World War II or the semiconductor industry, there's actually a long tradition of really critical industries where our country needs to bring online infrastructure. And I think this is one of those industries.
Government stipulation: ramp up rare earth magnet production tenfold. MP building bigger factory in Texas to meet US needs, complete in 2028.
China still makes well north of 90% of world's rare earth magnets, can hold world hostage.
Secretary Burgum supports stockpiling critical minerals and the MP deal:
You're talking about equity positions in private companies and price floors and in this case a demand that production increases 10-fold. That has the whiff of socialism. >> I wouldn't call it socialism. I'd call it pragmatism because free markets work but they don't work if you have an adversary that controls a monopoly that controls the price. >> I'm talking about China. There's no market setting the price. It's China setting the price. To get this industry started again, we have to do some things to kickstart the private capital.
China's retaliation was a catalyst; crisis needed to wake up.
If China says, "Listen, we're going to go invade Taiwan and if you stand in our way, we're shutting off our rare earth magnets." Well, that's the risk as it stands today. We need permission from the Chinese government to make things. We need permission from the Chinese government to make military things. And the practical reality is that is not an acceptable condition. And so we have to change this dynamic.
Current US-China trade truce expires in 8 months; absent new deal, US rare earth supply remains vulnerable short-term.
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